Analysis Battle lines are drawn over civil service pay

19 Feb 04
Shadow chancellor Oliver Letwin has outlined the Conservatives' policy of cutting state spending as a percentage of national income. But what does this expenditure strategy mean in policy terms?

20 February 2004

Public sector pay is always going to be a thorn in the government's side, but current dissatisfaction across all ranks of the civil service spectrum suggests that ministers need to turn their attention to getting their own house in order.

The sword of Damocles is hanging over Whitehall at the moment. If leaks from Sir Peter Gershon's efficiency review are to be believed, up to 80,000 civil service jobs are likely to be axed and the role of the 'generalist' civil servant phased out.

On top of this, senior civil servants have had to stomach a pay increase of just 2%, while at the other end of the spectrum talks between the government and the Public and Commercial Services union have broken down completely, resulting in widespread industrial action.

The PCS called 90,000 public servants in the Department for Work and Pensions and the Driving Standards Agency out on strike this week after employers failed to come up with pay levels and an appraisal system the union regarded as acceptable.

PCS general secretary Mark Serwotka has been consistently critical of 'poverty pay' levels in the lower ranks of the civil service. 'Civil servants are sick of the lack of recognition for their hard work. They deliver frontline public services but are regularly exposed to contempt from politicians who fail to understand the important work they do,' he says.

According to the PCS, one quarter of civil servants earn less than £13,750 a year and some starting salaries are as low as £9,900. Although both the DWP and the union say they are willing to re-enter negotiations, a speedy resolution seems unlikely, given union threats to implement a work-to-rule regime, which has been matched by an equally tough response from the DWP.

Sir Richard Mottram, permanent secretary at the DWP, says: 'If it looks as though [the PCS is] going to withdraw goodwill in a way that would impact on targets, we would take appropriate measures.

'We wouldn't accept that people could act in way that meant they weren't working to a reasonable standard.'

The PCS is also angry at the generous rewards being offered to top-flight civil servants. Under the recommendations set out by the Senior Salaries Review Body, the basic 2% rise is being supplemented by a generous incentive scheme, with the best performing civil servants being rewarded with increases of up to 9%.

In addition, minimum bonus payments should be 3% of salary or £2,500 – whichever is higher. A permanent secretary, for example, will be earning between £121,100 to £256,550 from April. Although such schemes were conceived to reward effective performance and encourage recruits from the private sector, they are also exacerbating tensions within the service itself.

A PCS spokeswoman told Public Finance that it was a 'disgrace' that such substantial rewards were being offered to senior civil servants when there were such low levels of pay across the service as a whole.

Nor are senior civil servants' representatives entirely happy. Jonathan Baume, general secretary of the FDA, says the rise offered by the Senior Salaries Review Body is 'extremely disappointing'.

'This fails to match inflation but will also mean that senior civil service salaries fall further behind other senior posts in the public sector. It will do nothing to assist the civil service in its drive to increase mobility between different areas of the public sector,' he says.

Capping the increase in senior civil service pay at 3.5% for each department makes it difficult for them to tackle outstanding equal pay anomalies, he adds.

If Gershon's reported conclusions are borne out when he reports this summer the government will need to call on all its diplomatic skills to prevent civil war from breaking out in the civil service.


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